REPUBLIC OF SLOVENIA

MINISTRY OF FINANCE
FINANCIAL ADMINISTRATION OF THE REPUBLIC OF SLOVENIA

Šmartinska cesta 55, PO Box 631, 1001 Ljubljana, Slovenia T: +386 1 478 38 00
F: +386 1 478 39 00
E: [email protected]
www.fu.gov.si

TAXATION OF INDIVIDUALS

Annual Income Tax Return

Questions & Answers

1ST version, MARCH 2016

TABLE OF CONTENTS

Question 1: How do I file the annual income tax return if I am a nonresident of Slovenia? .... 3
Question 2: How do I file the annual tax return once I have become a resident of Slovenia? 3
Question 3: What is the personal income tax rate schedule in Slovenia? ............................... 3
Question 4: Am I entitled to any personal tax allowances as a nonresident of Slovenia? ....... 3
Question 5: Am I entitled to any tax allowances as a nonresident of Slovenia if I am a
resident of another EU or EEA Member State? ....................................................................... 4
Question 6: What tax allowances can be claimed by residents (and in very special case
mentioned above nonresidents) of Slovenia under the Personal Income Tax Act? ................ 4
Question 7: What are personal tax allowances? ...................................................................... 5
Question 8: What are special personal tax allowances? ......................................................... 5
Question 9: What is the deduction for voluntary additional pension insurance? ..................... 6
Question 10: What are the family allowances? ........................................................................ 7
Question 11: What are the preliminary conditions that a person can be considered a
dependent under the Personal Income Tax Act? ..................................................................... 7
Question 12: When is an immigrant worker who came to work to Slovenia temporarily
entitled to claim the tax allowances?........................................................................................ 8
Question 13: Who is a dependent child under the Personal Income Tax Act in Slovenia? ..... 8
Question 14: Who are other dependent family members under the Personal Income Tax
Act? .......................................................................................................................................... 9
Question 15: How am I taxed in Slovenia if I am sent to work to Slovenia from my employer
in my home country (country of residence for tax purposes)? ............................................... 10
Question 16: Who pays social security contributions for me if I am sent to work to Slovenia
from my employer in my home country? ................................................................................ 10
Question 17: How are dividends taxed in Slovenia? .............................................................. 11
Question 18: How do nonresidents pay tax on dividends? .................................................... 11
Question 19: How do I claim a more favourable tax rate on dividends based on the Double
Taxation Agreement (DTA)? .................................................................................................. 11
Question 20: How is interest taxed in Slovenia if it is earned by a nonresident? .................. 12
Question 21: How is interest defined for tax purposes? ........................................................ 12
Question 22: How do nonresidents pay tax on interest in Slovenia? ..................................... 13
Question 23: What is the EU Savings Directive? ................................................................... 13
Question 24: How do I claim a more favourable tax rate on interest based on the Double
Taxation Agreement (DTA)? .................................................................................................. 13
Question 25: How are capital gains taxed in Slovenia? ......................................................... 14
Question 26: How do nonresidents pay tax on capital gains in Slovenia? ............................ 14
Question 27: How do nonresidents pay tax on capital gains from alienation of immovable
property in Slovenia?.............................................................................................................. 15
Question 28: How do nonresidents pay tax on capital gains from alienation of financial
capital (securities and ownership/equity shares and investment coupons) in Slovenia? ...... 15
Question 29: How do I obtain a notification for the purposes of claiming a tax credit of the
already paid tax in Slovenia in my home country (county of residence for tax purposes)? ... 16

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Question 1: How do I file the annual income tax return if I am a
nonresident of Slovenia?

Answer
If you are not a resident of Slovenia you do not need to file the tax return form and you do not
receive the indicative calculation of personal income tax. The tax that is withheld by the payer of
income or the tax that is settled as the advance tax payment counts as your final tax.

Question 2: How do I file the annual tax return once I have become a
resident of Slovenia?

Answer
The indicative calculation of personal income tax is automatically generated and prepared by
the Tax Administration of Slovenia for all residents from 2016 onwards.

So, once you have become a resident of Slovenia the indicative calculation of personal income
st
tax is sent to you by May 31 at the latest for the previous tax year under the conditions
mentioned above. In 15 days after this date the taxpayers are required to file a complaint if the
data on the calculation do not match their own. The Tax Administration will treat your complaint
as a tax return and assess the tax liability based on it. If the complaint is not filed the indicative
calculation does not only serve as a substitute for the return anymore, but it actually becomes a
tax return and an official tax assessment at the same time. If, for some reason, you did not
receive the indicative calculation, but you earned taxable income in the previous tax year you
st
are required to file the personal income tax return by 31 of July of the current tax year for the
previous tax year.

Question 3: What is the personal income tax rate schedule in Slovenia?

Answer
Annual personal income tax rate schedule in Slovenia used to be revalued each year depending
on the annual rate of inflation. The schedule for the current tax year was published in December
of the previous tax year by the Ministry of Finance.

For the tax year 2016 the tax rate schedule is the following:

When the Net Yearly Tax Base is in the

Income Tax in Euros amounts to
Interval
From To
0 8.021,34 16 %
8.021,34 20.400,00 1.283,41 + 27 % above 8.021,34
20.400,00 70.907,20 4.625,65 + 41 % above 20.400,00
70.907,20 25.333,60 + 50 % above 70.907,20

Net Yearly Tax Base is the gross income decreased by social security contributions and
personal allowances.

Question 4: Am I entitled to any personal tax allowances as a nonresident

of Slovenia?

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Answer
No. You are not entitled to any personal tax allowances if you are a nonresident of Slovenia for
tax purposes. The reason for this is that you are already entitled to allowances in your home
country (your country of residence for tax purposes). Since you cannot claim any allowance it is
not required that you file a tax return and the tax withheld by your employer or the payer of
income is a final tax. However, there is an exception to this provision if you are a resident of
another EU or EEA Member State and you earn income in Slovenia. More details are found in
the answer to the question no. 5 below.

Question 5: Am I entitled to any tax allowances as a nonresident of

Slovenia if I am a resident of another EU or EEA Member State?

Answer
There is a specific situation that under certain conditions allows nonresidents to be granted tax
allowances when they earn income in Slovenia as stated in the Article 116 of the Slovenian
Personal Income Tax Act. Nonresidents of Slovenia that earn income from employment, income
from business (excluding the special option for paying tax on income from small business that a
person owns as a sole entrepreneur or a self-employed person on the basis of revenues and
standard expenditures in the amount of 80% of the shown revenues), income from basic
farming and forestry activities, income from royalties and certain other types of income (like
prizes, rewards, stipends etc.) in Slovenia and are residents of an EU or EAA Member State
can claim tax allowances. In order to be able to claim allowances however, they have to prove
that the amount of all types of income combined that they have earned in Slovenia in a
particular tax year represented at least 90% of all of their taxable income. Furthermore, they
have to prove that income earned in Slovenia was exempt from taxation or was not taxed in
their country of residence. The tax allowances can be claimed on the form filed with the
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competent tax authority in Slovenia by July 31 of the current tax year for the previous tax year.

Question 6: What tax allowances can be claimed by residents (and in very

special case mentioned above nonresidents) of Slovenia under the
Personal Income Tax Act?

Answer
Slovenia’s Personal Income Tax Act does not allow for itemizing actual deductions such as
medical expenses, charitable contributions, etc. Instead every resident of Slovenia is entitled to
the general tax allowance as long as nobody is claiming the family allowance for her/him. It is
euro amount that reduces the amount of income on which you are taxed. The general allowance
is adjusted in the year in which the coefficient of growth of consumer prices in the current year,
compared to the past year, exceeds 1,03.

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From the tax year of 2013 onwards it is shown in the following table:

If the Overall Gross Income is in the General Tax Allowance in Euros to be deducted from
Interval Net Yearly Tax Base amounts to
From To
10.866,37 6.519,82
10.866,37 12.570,89 4.418,64
12.570,89 3.302,70

Apart from the general tax allowance residents and above mentioned nonresidents (residents
of an EU or EAA Member State) are entitled to personal allowances, special personal
allowances, deduction for voluntary additional pension insurance and family allowances that
further decrease the taxable amount. Self-employed persons can claim additional allowances
that are mentioned in the answer to the question no. 15 in brochure Taxation of individuals,
Advance tax payment.

Question 7: What are personal tax allowances?

Answer
Residents and nonresidents (under certain conditions that are mentioned in questions above)
can claim the following personal allowances:

- Disabled person’s allowance (if you are a disabled person with 100% physical impairment –
proved by a decision of the competent authority, you are entitled to a deduction of an additional
amount – from the tax year of 2013 onwards this deduction amounts to 17.658,84 euros.

- Seniority allowance (once you reach the age of 65, you are entitled to a deduction of an
additional amount – in the tax year of 2013 it amounts to 1.421,35 euros). Seniority allowance
will only be in use for the tax year of 2013, since it is being terminated in January 2014.

The following personal allowances can be claimed up to the amount of tax assessed on each
type of income received.

- Allowance for recipients of pension and occupational pensions (a person who receives a
pension based on compulsory pension and disability insurance is entitled to a deduction of
13.5% of the determined pension from the amount of tax they are required to pay)

- Personal allowance for other special groups (persons who receive state honorary
allowance from the state on the basis of their life achievements in art and other cultural fields
and persons who receive allowance for disability are entitled to the following tax allowance - the
same as above - a deduction of 13.5% of the determined amount of income from the amount of
tax they are required to pay)

Question 8: What are special personal tax allowances?

Answer
Only residents (and nonresidens under certain conditions, mentioned above) can claim the
following special personal allowances:

- Allowance for independent artists (self-employed persons who work in the cultural field and
who are registered with the Ministry of Culture are entitled to a deduction of 15% of their yearly

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revenues – limited to 25.000 euros – from their tax base; however, to be entitled to this
allowance a person must not conclude an employment contract and must not be doing business
in any other field but cultural)

- Allowance for independent journalists (self-employed and independent journalists that are
registered with the Ministry of Culture are entitled to a deduction of 15% of their yearly revenues
– limited to 25.000 euros – from their tax base; however, to be entitled to this allowance a
person must not conclude an employment contract and must not be doing business in any other
field)

- Allowance for independent professional sportsmen and sportswomen (self-employed

sportsmen and sportswomen who are registered with the Ministry of Education and Sport are
entitled to a deduction of 15% of their yearly revenues – limited to 25.000 euros – from their tax
base; however, to be entitled to this allowance a person must not conclude an employment
contract and must not be doing business in any other field)

- Student allowance (a person holding the status of a student, who goes to school aged 26 or
less earning income only temporarily and on the basis of a voucher from the competent
authority – most common Student Services Office – is entitled to a deduction of an additional
amount. The allowance equals 75 % of the general tax allowance (2.477,03 euros from the
year of 2013 onwards); furthermore students are also entitled to this allowance if they are aged
26 or more, but they enrolled in school before the age of 26, in this case the allowance can be
claimed 6 years from the date they enrolled into an undergraduate program and 4 years from
the date they enrolled into a graduate program). The student’s allowance can be claimed only
by residents or nonresidents if a special provision was included into the Double Taxation
Agreement (DTA) concluded between their country of residence and Slovenia that allows for
such a benefit. More information is available in the question no. 9 in brochure Taxation of
individuals, Advance tax payment.

- Allowance for daily migrant workers (a person who commutes to work across the border
every day or at least once a week is entitled to a deduction of a predetermined amount from
their yearly net tax base - 7.576,62 euros in 2013); additional conditions for this allowance are
having a nonresident employer across the border, receiving income from employment and
actually carrying out work across the border. The new tax reform adopted in 2013 abrogates the
allowance for daily migrant workers from January 2014. The allowance is still in use for the tax
year of 2013.

Question 9: What is the deduction for voluntary additional pension

insurance?

Answer
Residents and above mentioned nonresidents (residents of an EU or EAA Member State) can
claim the deduction for voluntary additional pension insurance in the amount of the insurance
premium that they pay for themselves. In order to be entitled to claim the deduction, insurance
premium has to be paid to the official pension plan provider with headquarters in Slovenia or
any other EU Member State. The pension plan has to be approved by the competent authority
and entered into a special register.

The amount of insurance premium that can be claimed as a deduction is limited up to 24% of
compulsory social security contributions for pension and disability insurance for the insured
person or up to 5,844% of a pension when a person is paying the insurance from a pension, but
this deduction is limited up to a certain amount (from the tax year of 2013 onwards this amount
is 2.819,09 euros).

6
Question 10: What are the family allowances?

Answer
Residents and nonresidents (under certain conditions that are mentioned in questions above),
who take care of their family members can claim the following allowances to be deducted from
their yearly net tax base:

- FOR DEPENDENT CHILDREN allowances can be summarized in the following table:

From the tax year of 2013 onwards

Yearly allowance in euros

For the first dependent child 2.436,92
For a dependent child that needs
8.830,00
special care and protection
For the second dependent child 2.649,24
For the third dependent child 4.418,54
For the forth dependent child 6.187,85
For the fifth dependent child 7.957,14
For the sixth dependent child 7.957,75 + 1.769,30

Allowance for the seventh child and any other additional child is calculated by adding the
amount of 1.769,30 euros to the amount of allowance for the previous child.

- FOR EVERY OTHER DEPENDENT FAMILY MEMBER there is an allowance of a

predetermined amount (from the tax year of 2013 onwards this amount is 2.436,92
euros).

It is important to notice that a dependent for whom somebody else (most of the times parents,
adoptive parents and spouses) has already claimed the family allowance will not be allowed to
claim the general tax allowance from their own income that they might have earned or received.

Question 11: What are the preliminary conditions that a person can be
considered a dependent under the Personal Income Tax Act?

Answer
In order for a person to be considered a dependent according to the Personal Income Tax Act
she/he has to fulfill at least one of the following conditions apart from others described in the
answers below:

- she/he needs to have a permanent or temporary home in Slovenia, registered with local
public authority OR

- she/he has to be a citizen of the Republic of Slovenia OR

- she/he has to be a citizen of the European Union OR

- she/he has to be a resident of the country with which Slovenia has concluded a Double
Taxation Agreement (DTA)

7
Question 12: When is an immigrant worker who came to work to Slovenia
temporarily entitled to claim the tax allowances?

Answer
Immigrant workers who came to Slovenia temporarily have to become residents of Slovenia for
tax purposes in order to be entitled to allowances. They can also claim the majority of
allowances if they are nonresidents of Slovenia, but they are residents of EU/EEA country and
they earn at least 90 % of all their taxable income in Slovenia. More details about this special
case are described in the answer to the question no. 5 and 6. Family allowance for dependents
who stayed in immigrant workers’ home countries however, can only be claimed by those
workers whose dependents satisfy the conditions described in answers below, who are citizens
of the EU or who are residents of the country with which Slovenia has concluded a DTA,
because these agreements enable for the exchange of information which confirms that
dependents actually fulfill the conditions under which the allowance for them can be claimed.

Question 13: Who is a dependent child under the Personal Income Tax Act
in Slovenia?

Answer
Dependent child of a taxpayer is:

- a child up to 18 years of age

- a child up to 26 years of age, but under the following conditions: goes to high school or
university continuously or with up to a year of deferral or interruption, not employed,
does not have her/his own source income or her/his income is lower than the amount of
the allowance for every other dependent family member – from the year of 2013
onwards this is 2.436,92 euros).

Her/his own income is all income covered by the Personal Income Tax Act except for
family pension, income earned holding the status of a student, stipend, family rents and
certain social security transfers like child addition, addition for a big family, addition for
special care and protection, unemployment benefit and parenting addition at birth.

- a child more than 26 years of age if she/he satisfies the conditions mentioned above
and if she/he enrolls in school before the age of 26 years; she/he is a dependent for the
period of 6 years after the day of enrollment into an undergraduate program and for 4
years after the day of enrollment into a graduate program

- a child above 18 years of age if she/he is unemployed, if she/he lives with her/his
parents and if she/he is registered with the Employment Service of Slovenia without
her/his own source of income or her/his income is lower than the amount of the
allowance for every other dependent family member – from the year of 2013 onwards
this is 2.436,92 euros). In this case her/his own income is all income covered by the
Personal Income Tax Act.

- a child that is entitled to addition for special care and protection in accordance with the
Parental Protection and Family Benefit Act

- a child that is entitled to addition for help and service in accordance with the Pension
and Disability Insurance Act

8
 The allowance explained in the last two points above can be claimed for children up to 18
years of age or up to 26 years of age if they continue attending school and even past this
age if their school program on a higher education level lasts for more than 5 or 6 years. If
they could not finish their education on time due to illness or injury allowance for them can
also be extended past 26 years of age limited to the period in which the schooling was
allowed to be postponed.

- a child that is in accordance with the Act Concerning Social Care of Mentally and
Physically Handicapped Persons unfit to work without age limitation

A child is a taxpayer’s own child, adoptive child, stepchild or a child of a taxpayer’s common
law partner and in certain circumstances a grandchild (if the taxpayer is entitled to an
allowance for the child’s parents or on the basis of a court ruling) and any other children if a
taxpayer takes care of them on the basis of a court ruling.

Question 14: Who are other dependent family members under the
Personal Income Tax Act?

Answer
Dependent family member of a taxpayer is:
1
- a spouse who is not employed, does not have a business and does not have her/his
own source of income or is such income less than the amount of the allowance for other
dependent family member – from the year of 2013 onwards 2.436,92 euros; own
sources of income means all types of income covered by the Personal Income Tax Act

- a divorced spouse if in accordance with a court ruling or an agreement adopted under

the Marriage and Family Relations Act a taxpayer is obliged to pay alimony to her/his
divorced spouse

- parents or adoptive parents of a taxpayer if they do not have their own sources of
income or if such income is less than the amount of the allowance for other dependent
family member – from the year of 2013 onwards this is 2.436,92 euros - if they live with
a taxpayer in a common household or if they live in an institution that provides social
care and protection (retirement home) and a taxpayer pays the bill for it; parents and
adoptive parents of a taxpayer’s spouse under the same conditions as mentioned
above if the spouse is not obliged to pay personal income tax under the Personal
Income Tax Act. Own sources of income means all types of income covered by the
Personal Income Tax Act

- member of a farming household, if a taxpayer’s primary source of income is the income

from basic agricultural and forestry activities, if such a member contributes to this
income with her/his work and does not have her/his own sources of income or such
income is less than the amount of the allowance for other dependent family member –
from the year of 2013 onwards this is 2.436,92 euros; under the condition that this
member’s children, spouse, parents or adoptive parents do not claim an allowance for
this person; own sources of income means all types of income covered by the Personal
Income Tax Act.

1
Spouse as it is defined in the Personal Income Tax Act is a person who is married to a taxpayer AND a
taxpayer's common-law partner as it is defined in the Marriage and Family Relations Act.

9
Question 15: How am I taxed in Slovenia if I am sent to work to Slovenia
from my employer in my home country (country of residence for tax
purposes)?

Answer
If the employer from your home country sends you to work to Slovenia for a limited period of
time (less than 183 days) and Slovenia has concluded a Double Taxation Agreement (DTA)
with your home country it is unlikely you will have to pay income taxes here. The right of the
country to tax you where the work is being carried out and the income is earned (source
country) is usually limited by the Article 15 of most DTAs Slovenia has concluded with other
countries. List and texts of DTAs Slovenia concluded with other countries can be found here.

According to this article the following conditions have to be met to prevent the source country to
tax you even if you carry out work there:

- Presence in Slovenia for less than 183 days (approx. half a year) in any 12-month
period commencing or ending in the tax year concerned,

- Your employer is not a resident of Slovenia,

- Income is not paid out by the employer’s permanent establishment in Slovenia.

It has to be emphasized that this is only the general text of the OECD Model Tax Convention
and you have to check the exact text of the DTA in question to verify the conditions set in it. If
you satisfy all these conditions, you will not be taxed in Slovenia on your earned income as a
sent worker. However, once one of the conditions is not met Slovenia has the right to impose
tax on your income from employment.

Question 16: Who pays social security contributions for me if I am sent to

work to Slovenia from my employer in my home country?

Answer
According to the Article 12 of the Regulation no. 883/2004 on the coordination on social security
systems posted workers continue to be subject to the legislation of the Member State in which
their employer normally carries out its activities as long as the anticipated duration of work in a
host country does not exceed 24 months and the person sent is not meant to replace another
person. Therefore, if you are sent to work to Slovenia from the employer in your home country
for a period of less than 2 years you will not have to pay social security contributions in
Slovenia. Accordingly, you will claim your social security benefits in your home country and not
in Slovenia.

However, according to Article 41, paragraph 2 of the Personal Income Tax Act you will be able
to deduct the amount of social security contributions paid in the country in which you are
included in the social security system from your tax base in Slovenia (if liable to tax). The
deduction can be made if the contributions paid abroad are comparable to the compulsory
contributions in Slovenia and if they are paid into a fund recognized for tax purposes in the
country in which they are being levied. Additional conditions for the deduction are that a person
was not a resident of Slovenia immediately before entering Slovenia to perform work here and
that the contributions were already being paid into the fund before entering Slovenia.

10
Question 17: How are dividends taxed in Slovenia?

Answer
Dividends and any other income based on the ownership share that individuals receive in
Slovenia are taxed at the flat rate of 25% at the time of payment. Being a type of capital income
they are not included in the indicative calculation of the personal income tax, where the tax is
settled on the annual basis.

Question 18: How do nonresidents pay tax on dividends?

Answer
Nonresidents only pay tax on Slovenian source dividends. Dividends have a source in Slovenia
when they are paid or credited by a resident of Slovenia or by a business unit of a nonresident
situated in Slovenia (i.e. a branch of a foreign company). The liability of withholding the tax on
dividends and other income based on the ownership share lies with the Slovenian entity (also
known as the payer of tax) that calculates the amount of dividends and pays them out.

Nonresidents might be subject to a more favourable tax rate on dividends, if the country of their
residence concluded a Double Taxation Agreement (DTA) with Slovenia and if such an
agreement allows for a lower tax rate on dividends or no tax at all. To determine your tax liability
you have to check a particular DTA.

Question 19: How do I claim a more favourable tax rate on dividends

based on the Double Taxation Agreement (DTA)?

Answer
Nonresidents can claim more favourable tax treatment from the DTA at the time of the payment
of income directly through a special procedure or they can claim a refund of overpaid tax.

A recipient (beneficial owner) of dividends can apply for a relief or exemption from the
withholding tax prior to the receipt of income. Application is made on the KIDO form - Annex no.
1 before the income is paid. Taxpayer entitled to benefits from the relevant DTA (beneficial
owner) files a filled out Annex no.1 form with the payer of income, who sends it to the
competent tax authority.

Whether the taxpayer is entitled to benefits or not has to be decided by the competent tax
authority. The payer of income is only authorized not to withhold the tax or to withhold the tax at
a lower rate upon the official permission from the competent tax authority.

Refund of the tax withheld can be claimed up to the difference between the full amount withheld
and the amount required by the relevant DTA. In case the taxpayer was exempt from tax
according to the DTA the full amount of withheld tax is refunded. Claim of the refund can be
made on the basis of the written application KIDO form - Annex no. 9 to the competent tax
authority.

11
Question 20: How is interest taxed in Slovenia if it is earned by a
nonresident?

Answer
Generally, income received in the form of interest by individuals in Slovenia is taxed at the flat
rate of 25% at the time of payment. Being a type of capital income they are not included in the
indicative calculation of the personal income tax, where the tax is settled on the annual basis.

However, for nonresidents the following is important. If Slovenia concluded a DTA with your
country of residence, the rate at which the tax on interest is levied to nonresidents can be lower
or there might be no tax at all. To determine your tax liability you have to check a particular
DTA.

Residents of Slovenia are entitled to a deduction of 1,000 euros from their tax base of income in
the form of interest received from money deposits held in Slovenian or in EU based banks and
certain other savings institutions. This is why they have to file the income tax return for this type
th
of interest to the competent tax authority by February 28 of the current tax year for the
previous tax year.

Question 21: How is interest defined for tax purposes?

Answer
Interest defined in the Personal Income Tax Act includes interest from loans, interest from
bonds, interest from money deposits held in banks and certain other savings institutions, other
similar financial claims to debtors, income from financial leasing, income from life insurance and
income obtained on the basis of the distribution of investment fund proceeds in the form of
interest. Furthermore, the concept of interest is broadened to include any compensation that
cannot be classified as the repayment of principal and that is received on the basis of a financial
relationship creating a debt claim, i.e. bonuses, discounts, premiums, risk compensation etc.
Additionally, income from life insurance also includes income from additional pension insurance
not based on the registered pension plan and income from voluntary pension insurance. Interest
from bonds also includes interest from bonds that can be exchanged for equity.

The following types of interest are explicitly excluded from taxation by the Personal Income Tax
Act: interest arising from overpaid taxes or social security contributions, interest accrued on
checking/current/transactional accounts and interest from life insurance in case of death.
Interest from life insurance policy that satisfies all of the following conditions: it does not allow
for the payment of the insured amount at least 10 years after buying the policy, the buyer of
insurance and insured person are the same person and the demand for payment of the insured
amount is not made earlier than 10 years after the purchase of the policy. Furthermore, interest
from a savings contract included into the national real estate savings scheme concluded for a
period of at least 5 years from which a person does not withdraw, 50% of interest on bonds
obtained by people entitled to a compensation in accordance with the Denationalization Act and
interest on participation in the common reserve funds of apartment/condominium buildings are
also excluded from taxation.

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Question 22: How do nonresidents pay tax on interest in Slovenia?

Answer
Nonresidents only pay tax on the Slovenian source interest defined in the answer to the
question no. 21 above. Apart from the source limitation nonresidents also do not pay tax on
interest from securities that were issued by the state (the Republic of Slovenia) and on interest
from bonds issued by an enterprise incorporated under the law of Slovenia (except bonds
issued in accordance with the Denationalization Act) subject to two conditions: bonds do not
carry the option to exchange them for equity and they are traded in an organized market in EU
Member State or in OECD Member State. Interest has a source in Slovenia when they are paid
or credited by a resident company or entity of Slovenia or by a business unit of a nonresident
(i.e. a branch of a foreign company) of Slovenia.

When the payer of interest has the status of the payer of tax (to simplify this usually means a
legal entity, sole entrepreneur, a business unit of a nonresident – a branch of a foreign company
in Slovenia or an agent) it is required to withhold the tax on interest in the name of the recipient.
If there is no payer of tax who would withhold the tax in the name of the recipient, the recipients
th
themselves have to file the Interest tax return with the competent tax authority by February 28
of the current tax year for the previous tax year.

Taxation of savings income in the form of interest payments in Slovenia and in other EU
Member States is dealt with the Council Directive 2003/48/EC (“EU Savings Directive”). The aim
of this Directive is for this type of income to be taxed effectively in the country of the beneficial
owner’s residence. The provisions of the Directive were implemented in Slovenian tax
legislation through Article 33 of the Personal Income Tax Act and Article 347 of the Tax
Procedure Act, where the savings income in the form of interest payments is defined.
Nonresidents from EU Member States will therefore not be taxed on such interest in Slovenia.
However, Slovenia will have to report such income that nonresidents from EU Member States
received in Slovenia to the tax authorities of their country of residence.

Question 23: What is the EU Savings Directive?

Answer
This directive was adopted with the purpose of effectively taxing the savings income in the form
of interest payments in the beneficial owner’s country of residence. It provides for the system of
automatic exchange of information on interest payments among EU countries (the exchange of
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data is due on June 30 each tax year for the previous tax year) the purpose of which is to
insure that EU taxpayers report their savings income in the form of interest payments to the tax
administrations of their own country of residence. In order for the aims of the Directive to be
achieved some non-EU countries like Switzerland and dependent or associated territories of EU
countries overseas concluded agreements with the EU regarding the interest payments to
provide for tax withholding or exchange of information on interest.

Question 24: How do I claim a more favourable tax rate on interest based
on the Double Taxation Agreement (DTA)?

Answer
Nonresidents can claim more favourable tax treatment from the DTA at the time of the payment
of income directly through a special procedure or they can claim a refund of overpaid tax. In
case there is no payer of tax the tax cannot be withheld in the name of the recipient and the

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recipient has to file a tax return (found on the link provided above in answer to question no. 22)
and the benefits from the DTA are claimed in the return itself.

A recipient (beneficial owner) of interest can apply for a relief or an exemption from the
withholding tax prior to the receipt of income. Application is made on the KIDO form - Annex
no. 2 before the income is paid. Taxpayer entitled to benefits from the relevant DTA (beneficial
owner) files a filled out KIDO Form with the payer of income, who sends it to the competent tax
authority.

Whether the taxpayer is entitled to benefits or not has to be decided by the competent tax
authority. The payer of income is only authorized not to withhold the tax or to withhold the tax at
a lower rate upon the official permission from the competent tax authority.

Refund of the tax withheld can be claimed up to the difference between the full amount withheld
and the amount required by the DTA. In case the taxpayer was exempt from tax according to
the DTA the full amount of withheld tax is refunded. Claim of the refund can be made on the
basis of the written application to the competent tax authority. It is made on the KIDO form -
Annex no. 10.

Question 25: How are capital gains taxed in Slovenia?

Answer
Capital gains in Slovenia are taxed at the flat rate of 25% at the time of payment. Capital gains
are capital income and they are not included in the indicative calculation of the personal income
tax, where the tax is settled on the annual basis.

The rate is lowered after every 5 years of ownership of the capital. So, the rate after 5 years of
ownership is 15%, after 10 years it is 10%, after 15 years it is 5% and after 20 years the rate is
0%.

Capital gains refer to gains earned by alienation of immovable property and financial capital
(securities, ownership or equity shares and investment coupons).

However, for nonresidents the following is important. If Slovenia concluded a DTA with your
country of residence, the rate at which the tax on capital gains is levied to nonresidents can be
lower or there might be no tax at all. To determine your tax liability you have to check a
particular DTA.

Question 26: How do nonresidents pay tax on capital gains in Slovenia?

Answer
Nonresidents only pay tax on the Slovenian source capital gains. Capital gains earned from
alienation of immovable property have a source in Slovenia when immovable property is
situated in Slovenia or when gains are derived from alienation of ownership share deriving more
than 50% of its value directly or indirectly from immovable property situated in Slovenia. Capital
gains earned from alienation of securities, ownership shares and investment coupons have a
source in Slovenia when securities and ownership shares are issued by the state, the Bank of
Slovenia, the municipalities or any entity incorporated under the law of Slovenia or when the
investment fund managing the alienated investment coupons is formed or established under the
law of Slovenia.

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The procedure of paying a tax on capital gains depends on the type of the capital in question.
The procedures are therefore summarized in answers to the following questions.

Question 27: How do nonresidents pay tax on capital gains from

alienation of immovable property in Slovenia?

Answers
Nonresidents only pay tax on capital gains from alienation of immovable property that is situated
in Slovenia. The tax on capital gains from alienation of immovable property is only levied on
gains from alienated immovable property that was obtained by the taxpayer after 1 January
2002 according to the provision of the Article 153 of the Personal Income Tax Act. Article 13 in
connection with the Article 6 of the most Double Taxation Agreements (DTAs) Slovenia
concluded with other countries gives the right to taxation of capital gains from immovable
property to the source country (country where the property is situated). However, you have to
check a particular DTA if this is true in your case.

Capital gains from alienation of immovable property are determined by the difference in value of
property at the time of alienating the property and at the time of obtaining the property. The
value of property in both cases is set by the amount in the sales contract or in the purchase
contract or in any other contract. However, for tax purposes the amount in the contract will not
be valid if it does not reflect the market value of the property. Value at the time of alienating the
property can be decreased by the expenses for maintenance or investments that a taxpayer
obtaining the property had to pay, by the amount of inheritance and gift tax, by the expenses of
the official evaluation of the property – not more than 188 euros – and the standard expense in
the amount of 1% of the value at the time of alienating the property. Value at the time of
obtaining the property can be increased by those same expenses. Capital loss resulting from
the alienation of one type of capital in a tax year can decrease the taxable amount of the capital
gains from alienation of another type of capital until the tax base reaches zero.

In certain cases the tax liability can be postponed at the time of alienation. Also, taxpayers are
exempt from the tax on capital gains from the alienation of a condominium/apartment or of a
house with the pertaining property when they have actually lived in it for at least 3 years before
the alienation. There is no exemption for the property or a part of the property that was used for
business and there is no exemption for the property that was leased.

Tax on alienation of immovable property is paid on the basis of the tax return that has to be filed
with the competent tax authority in 15 days after the alienation occurs. The date of alienation is
determined by the act of signing the contract or any other legal act (for example court ruling).

The competent tax authority confirms that the tax on capital gains from alienation of immovable
property was paid by the seal on the contract. If the alienation was exempt from tax (for
example if the owner alienated it after 20 years of ownership) the competent tax authority also
confirms the exemption by the seal on the contract. Only after the seal from the competent tax
authority is obtained the owner can enter the property in the Land Register of Slovenia which
secures to the owner the legal protection of rights arising from the property.

Question 28: How do nonresidents pay tax on capital gains from

alienation of financial capital (securities and ownership/equity shares and
investment coupons) in Slovenia?

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Answer
Even if nonresidents alienate Slovenian source financial capital they are not required to pay the
tax on capital gains earned by this alienation, unless the alienated security or equity share
represented a majority share in an entity (defined in the Slovenian Personal Income Tax Act as
10% of voting rights or 10% share in a capital or in a particular class of securities that a legal
entity issued directly or indirectly through an associated enterprise) in the period of 5 years
before the alienation.

Capital gains from alienation of financial capital are determined in the same manner as capital
gains from the alienation of immovable property described in the answer to the question no. 27
above. Furthermore, capital loss resulting from the alienation of one type of capital in a tax year
can decrease the taxable amount of the capital gains from alienation of another type of capital
until the tax base reaches zero.

Certain very specific alienations of the capital are not taxed and in certain cases the tax liability
can be postponed at the time of alienation. Taxpayers are exempt from taxation of capital gains
in the following cases. They are exempt at the first alienation of shares or investment coupons
obtained in the process of denationalization, at the alienation of securities and at the alienation
of a share obtained on the basis of venture capital investment.

A nonresident that alienated a majority share is required to file a tax return in 15 days after the
alienation of capital. If there were more alienations of capital in the previous tax year a
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nonresident can report them in a joint tax return filed with the competent tax authority by 28 of
February of the current tax year for the previous tax year. The return must be filed in an
electronic form when there are more than 10 alienations in the previous year, this applies for
tax refund until 2015 . The return must be filed in an electronic form when there are more than
10 transactions in the previous year, for tax refund for 2016 onwards.

However, if a DTA between Slovenia and a country of residence of the owner of alienated
financial capital exists they can claim relief or exemption from such income to be taxed in
Slovenia in a return itself.

Question 29: How do I obtain a notification for the purposes of claiming a

tax credit of the already paid tax in Slovenia in my home country (county
of residence for tax purposes)?

Answer
If you are a nonresident of Slovenia and you received income which was taxed in Slovenia in
accordance with the law and the relevant DTA and you want to claim already remitted amount
of tax that you have paid in Slovenia as a tax credit in your own country of residence the
competent tax authority in Slovenia can issue a notification stating how much tax has already
been paid in Slovenia upon request.

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